Punitive fees have reached new highs and continue
to siphon money out of consumers' checking accounts.

Also, it still costs more to open a checking account
at an Internet bank, but after that initial investment you'll earn
higher interest, pay lower service fees and need less money in your
account to avoid those fees.

Those
are some of the findings from the fall 2003 Bankrate.com national
survey of checking accounts.

Finding the best checking account requires knowing
your checking account habits. The right account is an extremely
useful financial tool. The wrong account is like a paper cut --
you can't stop the bleeding. In this case, it's money bleeding out
of your account every month, every time you use an ATM, every time
you use any of a slew of banking services.

Before we look at the results, it should be noted
that one of Bankrate's newest features is an extensive database
to help you find the checking account that best fits your needs.
More than 1,500 checking accounts offered nationwide in 152 markets
of all sizes are canvassed daily. Whether you live in New York or
California or somewhere in between, you can find the best deal in
your area by clicking
here.

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For an overall view of the costs involved in owning
a checking account, we continue to evaluate the data we receive
from the top 10 institutions in the 25 largest markets. We have
revised our survey in that we now compare one interest-paying and
one noninterest checking account from each institution. The accounts
selected are the ones that can be opened for the lowest minimum
deposit.

As always, we continue to survey a group of Internet
banks to see how online checking accounts compare to those at traditional
banks. This survey includes 29 online accounts from 18 institutions.

As in previous surveys, we find that certain fees
keep consumers digging deeper into their pockets. Once again, the
main culprits are ATM fees and bounced-check fees.

ATM fees -- brick-and-mortar banks

No matter where you live, ATM fees will soak you
if you use a machine that isn't owned by your bank. Use another
bank's ATM and you'll pay an average surcharge of $1.40. That's
a new high, up from $1.37 in spring 2003, and up a whopping 57
percent from the average of $0.89 charged five years ago.

Thanks in part to Washington Mutual's repeal of
surcharges nationwide, the percentage of institutions that levy
a surcharge has dropped in the past 18 months from 94.9 percent
to 92.8 percent. That's a difference of five institutions that
no longer assess surcharges.

The average fee to use a non-bank ATM dipped to
$1.29 from $1.30 since spring 2003. But taking a longer-range
look, the average fee for a withdrawal from a non-bank ATM has
jumped 19 percent in the past five years, from $1.08 to $1.29.

Checking Accounts: Brick-and-mortar banks

Bounced-check fees Nonsufficient funds fees, better known
as bounced-check fees, are now averaging $25.80. That's up from
$25.52 in the spring and 20 percent higher than the $21.57 average
of five years ago. By contrast, the Consumer Price Index is up
less than 13 percent in the same period.

Minimum to open The average minimum to open a checking account and earn interest
hit a new high, up 17 percent since Spring 2003 to $494.73. The
average minimum to open a noninterest account is $59.49. That's
consistent with the $55.39-$67.37 range we've seen in the past
five years.

Monthly service fees If you want to avoid monthly service fees on an interest-bearing
account, be prepared to keep a staggering $2,257.82 average balance.
That's up 12 percent since spring and more than 44 percent higher
than what was required five years ago.

You're much better off opting for the noninterest
account, where you'll have to keep a much more reasonable average
of $245.37 to avoid fees. That number, in fact, is down 31 percent
since spring and is less than half of the $564.69 peak we saw
in spring 2000.

The average monthly service fee for interest accounts
has hit a new high of $10.86, up from $10.68 in the spring. The
average for noninterest accounts is $3.72.

Yields The ever-declining interest-rate environment puts the current
average yield at 0.27, down from 0.39 percent in the spring and
down from 1.01 percent in fall 2000 before the interest rate cuts
began.